Germany’s economy is no longer experiencing a bump in the road, but rather a prolonged slowdown that risks tipping into recession as export-reliant companies face weakening growth prospects, according to a dpa survey of German economists.
“Economic blip sounds a little too optimistic for me,” Eckart Tuchtfeld, an economist with Germany’s Commerzbank, told dpa.
“I would instead speak of a marked downward movement.”
Katharina Utermoehl of the German insurer Allianz agreed: “This is no longer a dent in growth, but rather a sustained weak phase.”
Utermoehl pointed to a whole range of struggles for Europe’s largest economy, ranging from a global trade downturn and weak auto sector to heightened political uncertainty over trade disputes, Italy and Brexit.
Those dangers leave many economists seeing little chance of a recovery in the second half of 2019. “The risk of a recession is meanwhile becoming quite high,” Utermoehl said.
The economists’ view is in line with that of the German government and citizens. A survey last week found that half of Germans expect the economy to worsen in the coming years.
Only 14 per cent of Germans expect an economic upturn in the next few years, while 34 per cent expect things to stay the same, the survey commissioned by broadcasters RTL and n-tv found.
Berlin has also cut its economic growth predictions in recent months. The government’s spring forecast predicted growth at just 0.5 per cent for 2019.
Germany’s economy grew by 0.4 per cent in the first quarter of 2019, after narrowly avoiding recession at the end of 2018.
The Economic Ministry predicted the “weak economic trend” continued for the three months that ended in June.